Chancellor George Osborne vows to stick to his plan for economic recovery
despite Moody's downgrading the UK's credit rating rating from AAA to AA1.

9:45AM GMT 23 Feb 2013

In a symbolic blow to the Government’s economic plans, Moody’s, one of the biggest global credit ratings agencies, downgraded Britain.

The agency said it had acted because of “continuing weakness in the UK's medium-term growth outlook”, the risk that the Government will fail to hit its targets for reducing the deficit and the UK's “high and rising debt burden”.

However, Moody’s predicted that on its current course, the UK will eventually regain its AAA status. Any relaxation in the deficit-reduction could lead to another downgrade, it suggested.

Mr Osborne insisted that the Coalition will not change course on the economy, saying the downgrade made it all the more important to stick to attempts to cut Britain’s deficit.

“Tonight we have a stark reminder of the debt problems facing our country - and the clearest possible warning to anyone who thinks we can run away from dealing with those problems,” Mr Osborne said.